the credit of the bank descends from father to son:  this inherited wealth soon begins inherited refinement.  Banking is a watchful, but not a laborious trade.  A banker, even in large business, can feel pretty sure that all his transactions are sound, and yet have much spare mind.  A certain part of his time, and a considerable part of his thoughts, he can readily devote to other pursuits.  And a London banker can also have the most intellectual society in the world if he chooses it.  There has probably very rarely ever been so happy a position as that of a London private banker; and never perhaps a happier.

It is painful to have to doubt of the continuance of such a class, and yet, I fear, we must doubt of it.  The evidence of figures is against it.  In 1810 there were 40 private banks in Lombard Street admitted to the clearing-house:  there now are only 3.  Though the business of banking has increased so much since 1810, this species of banks is fewer in number than it was then.  Nor is this the worst.  The race is not renewed.  There are not many recognised impossibilities in business, but everybody admits ’that you cannot found a new private bank.’  No such has been founded in London, or, as far as I know, in the country, for many years.  The old ones merge or die, and so the number is lessened; but no new ones begin so as to increase that number again.

The truth is that the circumstances which originally favoured the establishment of private banks have now almost passed away.  The world has become so large and complicated that it is not easy to ascertain who is rich and who is poor.  No doubt there are some enormously wealthy men in England whose means everybody has heard of, and has no doubt of.  But these are not the men to incur the vast liabilities of private banking.  If they were bred in it they might stay in it; but they would never begin it for themselves.  And if they did, I expect people would begin to doubt even of their wealth.  It would be said, ’What does A B go into banking for? he cannot be as rich as we thought.’  A millionaire commonly shrinks from liability, and the essence of great banking is great liability.  No doubt there are many ‘second-rate’ rich men, as we now count riches, who would be quite ready to add to their income the profit of a private bank if only they could manage it.  But unluckily they cannot manage it.  Their wealth is not sufficiently familiar to the world; they cannot obtain the necessary confidence.  No new private bank is founded in England because men of first-rate wealth will not found one, and men not of absolutely first-rate wealth cannot.

In the present day, also, private banking is exposed to a competition against which in its origin it had not to struggle.  Owing to the changes of which I have before spoken, joint stock banking has begun to compete with it.  In old times this was impossible; the Bank of England had a monopoly in banking of the principle of association.  But now large joint stock banks of deposit are among the most conspicuous banks in Lombard Street.  They have a large paid-up capital and intelligible published accounts; they use these as an incessant advertisement, in a manner in which no individual can use his own wealth.  By their increasing progress they effectually prevent the foundation of any new private bank.