I cannot, therefore, expect with certainty the continuance of our system of private banking.  I am sure that the days of small banks will before many years come to an end, and that the difficulties of large private banks are very important.  In the mean time it is very important that large private banks should be well managed.  And the present state of banking makes this peculiarly difficult.  The detail of the business is augmenting with an overwhelming rapidity.  More cheques are drawn year by year; not only more absolutely, but more by each person, and more in proportion to his income.  The payments in, and payments out of a common account are very much more numerous than they formerly were.  And this causes an enormous growth of detail.  And besides, bankers have of late begun almost a new business.  They now not only keep people’s money, but also collect their incomes for them.  Many persons live entirely on the income of shares, or debentures, or foreign bonds, which is paid in coupons, and these are handed in for the bank to collect.  Often enough the debenture, or the certificate, or the bond is in the custody of the banker, and he is expected to see when the coupon is due, and to cut it off and transmit it for payment.  And the detail of all this is incredible, and it needs a special machinery to cope with it.

A large joint stock bank, if well-worked, has that machinery.  It has at the head of the executive a general manager who was tried in the detail of banking, who is devoted to it, and who is content to live almost wholly in it.  He thinks of little else, and ought to think of little else.  One of his first duties is to form a hierarchy of inferior officers, whose respective duties are defined, and to see that they can perform and do perform those duties.  But a private bank of the type usual in London has no such officer.  It is managed by the partners; now these are generally rich men, are seldom able to grapple with great business of detail, and are not disposed to spend their whole lives and devote their entire minds to it if they were able.  A person with the accumulated wealth, the education and the social place of a great London banker would be a ’fool so to devote himself.  He would sacrifice a suitable and a pleasant life for an unpleasant and an unsuitable life.  But still the detail must be well done; and some one must be specially chosen to watch it and to preside over it, or it will not be well done.  Until now, or until lately, this difficulty has not been fully felt.  The detail of the business of a small private bank was moderate enough to be superintended effectually by the partners.  But, as has been said, the detail of bankingthe proportion of detail to the size of the bankis everywhere increasing.  The size of the private banks will have to augment if private banks are not to cease; and therefore the necessity of a good organisation for detail is urgent.  If the bank grows, and simultaneously the detail grows in proportion to the bank, a frightful confusion is near unless care be taken.