Учебное пособие «Подготовка профессиональных писем специалистами-логистами на английском языке»

recognised «liquidity ratio», but the foundations were being laid for that, and for the principle upon which the clearing banks still operate, that money deposited on demand must not be lent for long term. A banker must be able to pay his customers on demand; next week isn't good enough.

EXERCISES

A.Read the text and complete the sentences given below.

1.The national banks of Great Britain before the end of the century...

2.At that time the best known was...

3.The Bank of England was founded ...

4.The Bank of Russia was founded...

5.The Bank of France was founded ...

6.The importance of the development...

7.The model of the great Continental banks ...

8.Banks of issue ...

9.The charter of the Bank of England in 1708 ...

10.The Bank of Scotland in 1716...

11.The private bankers ...

12.The matter of judgment as to who could safely be al lowed a loan and who must be refused ...

B.Give the extensive answer to these discussion questions.

I. Why was there to be another kind of banking development in England

before the end of the century?

2.Why was the Bank of England founded in 1694?

3.What was a loan the founders of the Bank of England were to provide the Government?

4.When was the charter of the Bank of England renewed? 5.Why was the Bank of England a formidable competitor for the

private bankers?

C.Single out the main facts from the text and present them in a synopsis.

D.Sum up the text and present your summary in class.

E.Discuss the text with your partner.

КYour presentation at the lesson «Advertizing».

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THE HISTORY OF BANKING

NATIONAL WESTMINSTER

Few countries, if any, can boast as long a period as Britain in: which no depositor in a bank has lost his money; the last bank failure in this country was as long ago as 1920. But this record of strength is in marked contrast to the chequered history of banking that preceded it.

The Bank of England monopoly was certainly a principal contributory factor in the banking failures that are so regular a theme in nineteenth century fiction; as the Industrial Revolution enlarged the scope of enterprise there was increasing need for banks with larger resources than any six partners could, be expected to muster. Scotland, with joint stock banks from the start, avoided this weakness. But larger scale organisation on the joint stock principle could not by itself prevent disaster; in due course joint stock banks also were to fail, and indeed one of the most dramatic of all the failures was that of a Scottish joint stock bank, the City of Glasgow Bank, in 1878. Judgment was needed in large banks as in small.

The restriction to six partners remained until 1826. The first years of the new century had seen financial crises of increasing severity, each accompanied by bank failures, with the crisis of 1825, when 73 of the country's principal banks stopped payment, the most severe yet. The advocates of joint stock banking had to fight hard against the vested interests of the Bank of England, on the one hand, and of the private bankers on the other, but in 1826 they achieved limited victory, with Parliamentary approval for the establishment of joint stock banks outside a radius of 65 miles from London: outside, that is, the area dominated by the Bank of England note.

This was obviously not enough. Now, against the continued resistance to joint stock banking near London, the reformers pointed out that the Bank's charter perhaps did not prohibit deposit banking by larger groupings; and as in fact the London bankers had for many years found the competition of the Bank of England note too strong to be effectively met, and had thus learned that deposit banking could be just as profitable as (he note issue, it was not long before plans were made to create a London joint stock bank confined to deposit banking. The Bank of England sought to have their full monopoly confirmed, and failed; when their charter fell due for renewal again, in 1833, the position was put beyond doubt, and joint stock banking became permissible throughout the United Kingdom.

The private bankers were to prove formidable fighters, however, with the Bank of England usually on their side, and the rest of the century was

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to see their long drawn struggle for survival. At first there was open hostility; it was not until 1854, for example, that the «new» banks were admitted to the Gearing House. But in the latter half of the century the process became one of erosion, the private banks being successively absorbed by the joint stock banks, and these latter increasingly amalgamating into larger and larger concerns. The process was to reach its culmination at the end of the first world war, when the Big Five took shape. By 1S66 there were 154 joint stock banks with 850 branches, against 246 private banks with 376 branches. In 1900, 77 joint stock banks had 3,757 branches, and there were only 19 private banks left. Now there are the 6 clearing banks, all of them joint stock. The last of the country banks, Gunners of Bishop's Waltham, was absorbed by Barclays as recently as 1953.

That is to go a little ahead of our story. The nineteenth century saw other banking developments besides the growth of joint stock banking. Not the least significant was the first popularisation of banking, largely initiated by the «new» banks; an interesting parallel can be seen in the efforts of the banks today to spread the banking habit wider still. Until the middle of the nineteenth century banking was still primarily for the wealthier classes. The cheque was in very restricted use, and still burdened with ad valorem stamp duty, the duty increasing with the amount of the cheque. But the joint stock banks, naturally turning their attention lo new fields for development, sought middle-class business. And the fixing of the stamp duty on cheques in 1853 at a standard one penny (it was increased to two pence in 1918 and abolished in 1971) gave the new banking a useful fillip. From then onwards the development of the cheque at the expense of the bill of exchange largely accompanied the growth of the joint stock banks at the expense of the private banks.

The bill of exchange provided (and of course still provides) a method of financing trade as well as a means of transferring money; when the banks discounted bills of exchange payable at a future date they were in fact lending money against the security of the signatures on the bill. The new banking brought increasing use of the overdraft, which business men saw as a more flexible means of finance than the bill, so it was the overdraft and the cheque combined rather than the cheque alone that superseded the bill in inland trade; in overseas trade the bill of exchange is still very widely used.

But perhaps in the long term the most important of nineteenth century changes was the increasing efficiency of the banking system as a whole. Financial crises occurred with monotonous regularity at approximately ten-year intervals; but the Baring crisis in 1890, though potentially as severe as any, produced no bank failures and no public panic. The days of «chain-effect»

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crises were past.

EXERCISES

A.Read the text and complete the sentences given below.

1.Few countries can boast ...

2.The bank of England monopoly was ...

3.In Industrial Revolution ...

4.In 1825 some principal English banks ...

5.The Bank of England learned ...

6.The private bankers were to prove ...

7.Until 1854 the new banks were admitted to ...

8.At the end of the first world war ...

9.In 1953 Gunners of Bishop's Waltham ...

10.The most important of nineteenth century changes was ...

B.Give the extensive answer to these discussion questions,

1.Which countries can boast as long a period as Britain in which no depositor in a bank has lost his money?

2.How did Scotland, with joint stock banks from the start manage to avoid that weaknese?

3.Who had the advocates of joint stock banking to fight hard against?

4.What did the reformers point out?

5.What provided (and of course still provides) a method of financing trade as well as a means of transferring money?

C.Single out the main facts from the text and present them in an abstracts of communication.

D.Sum up the text and present your summary in class.

E.Discuss the text with your partner.

F.Your presentation at the lesson «Marketing».

THE HISTORY OF BANKING

NATIONAL WESTMINSTER

In this salutary improvement the Bank of England had played an increasingly important part. In the year of the Baring crisis the Bank organised the joint action that saved the situation, and it was only then that it fully accepted responsibility for the financial well-being of the country, and

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emerged into its adult status as the first of the world's central banks. But throughout the century its importance as the pivot of the banking system had been growing, and by 1900 it had moved a long way from the earlier years of bigoted opposition to the new joint stock banks.

Almost from its foundation the belief had become widespread that in times of stress the Government would stand by the Bank: that, and the fact that it was the Government's Bank, was the foundation of its later status. As we have seen already, the Bank's notes drove the notes of the other London bankers out of use; in the second quarter of the nineteenth century the opening of branches in the country — there were 13 by 1844 — carried the i nfluence of the Bank of England note into distant parts of the country, and the 1833 Charter Act made them legal tender. During the same period heated controversy developed as to the extent to which bank notes in general, but the Bank's notes in particular, ought to be backed by gold; the effects of the general use of paper currency, still relatively new, were not fully understood, and although one school of thought argued against a rigid restriction to gold (and securities) backing, on the grounds that it allowed no flexibility in times of strain, even exponents of this theory stopped short of advocating a completely managed cur rency. In the 1844 Charter Act restriction won the day, the Bank being allowed to issue notes only to a Fixed amount against securities (the fiduciary issue) and a varying amount against gold backing. The Bank could not yet be trusted to manage a fully flexible issue; and the Bank was at that stage relieved to be freed of a responsibility it had never sought.

But the 1844 Act confirmed the status of the Bank of England note, by providing that no new bank should in future have the right of note issue, and that any banks that amalgamated should lose their existing right. This latter provision meant that in the continuing process of amalgamation more and more note issues disappeared; the last went in 1921, when Fox Fowler & Co. was absorbed by Lloyds Bank. And, as those who had argued against restriction had predicted, every successive crisis in the years that followed 1844 made suspension of the 1844 Act necessary, so that notes in excess of the limit could be issued. It was not until the eruption of 1914 that a wholly managed currency was forced upon the country, but in the years before then the country

The Bank was learning also about the management of the country's financial machinery generally. The use of Bank Rate, the Bank's best known instrument of control, as a monetary regulator, had been impossible when the old usury law prohibited a rate of more than 5%. Even after the Bank was freed

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from this ban by the 1833 Act it was a long time before the connection was fully worked out between the level of Bank Rate and, on the one hand, external financial strain, and on the other, internal trade depression. But in 1890 the Bank consolidated its control over the monetary system by announcing that it would always in future discount approved bills for the discount market at not less than Bank Rate; and although there has been hot debate through the years, and especially between the wars, as to whether Bank Rate was being used wisely, there has never been any doubt in the past fifty years about its effectiveness as an instrument of monetary control.

Last century the Bank saw some other changes. In particular, the Bank of England Act of 1946 brought it under public control; until then the relationship between the Bank and the Treasury had been undefined, although, obviously, for a long time before the 1946 Act each of necessity had at least to give great weight to the views of the other. This «nationalisation» of the Bank went through almost painlessly; a much more traumatic experience had been the abandonment of the gold standard in the twenties, after the most painful heart-searching, and the final adoption of a managed currency. The struggle to «stay on gold», continued against formidable odds after the first world war, was given up with reluctance, and considerable fear of the consequences. In the event an inconvertible currency has proved neither catastrophe nor panacea, and controversy has now become international around the search for more efficient ways of making money serve the greatest good of the greatest number.

But despite all changes the Bank's position in the banking system has aliened little fundamentally since the early years of the twentieth century. The National Debt, which it manages as the Government's bank, has increased out of recognition; the country's financial problems are of a different scale and of a different nature; the Bank is an arm of Government instead of being, in form, a private enterprise; and it is no longer the pivot upon which the world's banking structure turns. But the Bank is still the centre of the country's banking system and still performs essentially the same internal functions as it did before the first world war. Nothing that has happened to it since has been as radical a change as the growth from a commercial bank in competition with the other banks to the doyen of the central banks of the world.

EXERCISES

A.Read the text and complete the sentences given below.

1.In the year of the Baring crisis ...

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2.In the second quarter of the nineteenth century ...

3.In the 1844 Charter Act ...

4.The 1844 Charter Act confirmed ...

5.The Bank was learning about ...

6.The use of Bank Rate ...

7.The Bank of England Act of l946 ...

8.The country's financial problems are ...

9.The National Debt ...

10.The Bank of England is still ...

B. Give the extensive answer to these discussion questions.

1.What part had the Bank of England played in the salutary improvement?

2.What Bank drove the notes of the other London bankers out of use?

3.When did the Act confirm the status of the Bank of Eng land note?

4.What is a monetary regulator?

5.What other changes has the Bank seen?

С. Single out the main facts from the text and present them in an abstracts of communication.

D. Sum up the text and present your summary in class. E.Discuss the text with your partner.

THE HISTORY OF BANKING

NATIONAL WESTMINSTER

Two world wars have, it was suggested earlier, had comparatively little effect on the function of the Bank of England in the banking structure of the country. To some extent the same can be said of the structure as a whole: the clearing bank amalgamations at the end of the first world war were the culmination of the long process of structural development. The amalgamations were followed by consolidation and expansion, notably through branch opening, with the branch manager playing an increasingly important rdle as the financial counsellor of his community. It is noteworthy that since the great modern banks took shape no crisis has been fierce enough to shake the banking system, as those of other countries have on occasion been shaken. The massive branch banking system that grew out of the excessive fragmentation of the past has justified itself in that not unimportant respect.

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As the number of banks declined rapidly around 1918, leav ing five large and six smaller survivors, there was widespread fear that competition would be unduly restricted if the process was carried any further. Later the point of view changed, and the question was increasingly asked whether five or even six banks in the same High Street could operate at maximum efficiency. The National Board for Prices and Incomes, in their report on bank charges in 1967, put the case for further amalgamation, and the rationalisation that could result; and the linking of National Provincial and Westminster early in 1968 was a first move in that direction. Since then other mergers have followed, leaving a big four and two smaller banks in England and Wales. In Scotland too, the number of banks has fallen to three. It has to be remembered, however, that there is advantage to the customer who, refused a loan or dissatisfied with the service in one bank, can take his custom to another.

The changes described in this booklet have been mainly structural; the changes in the clearing banks in this century have included also substantial extensions of their activities. In the early years of the century they developed their own expertise in foreign exchange and the finance of foreign trade, which had previously been the concern of the merchant banks and the overseas banks. A little later they moved into other specialised activities — trustee and executor work, and, to a lesser extent, income tax for personal customers. And in recent years, as the long series of postwar credit restrictions gave no sign of ending, the banks have shown again a lively interest in the possibilities of change. Like their predecessors of a hundred years ago, today's bankers seek to extend the banking habit into a class so far largely unfamiliar with it, and some of the manifestations of this drive for new business have achieved headline status. The introduction of electronics to banking, formidable undertaking though it has been, can be viewed as merely a sophisticated extension of the mechanisation of twenty years before, producing as visible sign only a line of magnetic ink at the bottom of the cheque.

But the move of the banks into the field of hire purchase, a first new step in diversification, was followed by other kinds of extension of the banks' traditional business. Two banks have made a tentative move into the business of new issue — the management of the raising of capita l by public companies by the issue of new shares, a business traditionally associated with the merchant banks. The banks now have a substantial stake in the unit trust movement. The advent of the National (Post Office) Giro was anticipated by the introduction of Bank Giro, which includes the credit transfer (renamed Bank 94 Giro credit) and the new service of direct debiting.

The credit card, introduced by one of the banks, may prove to be an

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innovation with more far-reaching effects. Cash dispensers, cheque cards and budget accounts are other services recently introduced to aid the convenience of customers. The banks are currently showing no signs of sleepiness, canvassing fresh possibilities of diversification and increasingly willing to tell the public about their activities, through advertising and press relations, in a manner that would have been anathema to their more secretive predecessors. The goldsmiths who set up as bankers three hundred years ago would recognise the essentials of today's banking business, but they would be surprised at its ramifications.

The main thread of banking history in this country has been the development of the clearing banks from their goldsmith/merchant beginnings, with the Bank of England growing from the same soil into an altogether different kind of bank. But something must be said here, however briefly, about the other kinds of banking that have grown up alongside the emerging clearing banks. It is outside the scope of this booklet to discuss the finance and hire-purchase houses, on the one hand, or the discount and issuing houses on the other, closely akin though both are to the banks. But the savings banks, the merchant banks and the overseas banks must all be brought within even the briefest history of English banking.

The savings banks were originally philanthropic institutions, designed to help the extremely poor to move away from poverty. The Scots were a little ahead of the English with the first of these banks, helped, no doubt, by the fact that the joint stock banks in Scotland had already taken the banking habit somewhat lower in the social scale than the private banks had done in England. By around 1820 (here were several savings banks in being controlled by local men of substance, always well-intentioned but not always experienced in financial matters. As the movement grew there was increasing concern as to its control and there were successive Acts of Parliament to regulate the operation of the banks. In 1861 the Post Office Savings Bank was set up, but even the creation of this State-operated competitor did not stop the continued advance of the individual savings banks; and the formidable competition they all provide today for the clearing banks, in their search for new deposits, is eloquent testimony to the soundness of the grass roots in which they are established.

The merchant banks had quite a different origin, and a much more picturesque history. For the most part they started, as did the country banks, with the activities of merchants, the earliest of them in the latter part of the eighteenth century; only in this instance the merchants were foreigners, or Englishmen with foreign connections, trading in this country. As with the

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country bankers, financial activity stemmed from commerce: men with one foot in London and the other in Paris, or Amsterdam, or Brussels, were obviously well placed to handle the finance of trade between the two countries concerned.

Their original specialisation in the finance of trade with particular countries has long since broadened, although in many of the merchant banks the original European connection is still a main concern of the business. And the range of the business has increased, too, from the simple finance of trade, to include especially the business of bill acceptance and share issue, and, in certain instances, particular activities, notably bullion dealing.

In their early years the merchant banks had a virtual monopoly of specialist knowledge of the finance of overseas trade, mainly with Europe. As we shall see, the clearing banks made a late entry into this field, but from as early as the 1830's there were new joint stock foundations handling business with Australasia, while other notable foundations later in the century dealt with South America and South Africa. At the same time the banks of many other countries found it advantageous to have branches, or at least agencies, in the financial centre of the world. By the turn of the century there were in London some 70 overseas banks, either the head offices of British banks operating overseas or branches of Foreign banks. The number is now about 150, making a substantial contribution to the City's invisible earnings.

EXERCISES

A.Read the text and complete the sentences given below.

1.Briefly something must be said ...

2.The savings banks were ...

3.Byaround 182Othere were ...

4.In 1861 the Post Office Savings Bank was ...

5.The merchant banks had ...

6.Financial activity stemmed ...

7.A main concern of the business is ...

8.The merchant banks had ...

9.In London some 70 overseas banks ...

10.Two world wars have had comparatively little effect...

11.It is noteworthy ...

12.The advent of the National (Post Office) Giro was anticipated by

...

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