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THE PRIVATE BANKS

opportunity"; it is in a better position to do its business than any one else is; it has a great advantage over old competitors and an overwhelming superiority over new-comers. New people coming into Lombard Street judge by results; they give to those who have; they take their money to the biggest bank because it is the biggest. I confess I cannot, looking far forward into the future, expect that the smaller private banks will maintain their ground.[1] Their old connections will not leave them; there will be no fatal ruin, no sudden mortality. But the tide will gently ebb, and the course of business will be carried elsewhere.

Sooner or later, appearances indicate, and principle suggests, that the business of Lombard Street will be divided between the joint stock banks and a few large private banks. And then we have to ask ourselves the question, Can those large private banks be permanent? I am sure I should be very sorry to say that they certainly cannot, but at the same time I cannot be blind to the grave difficulties which they must surmount.

In the first place, an hereditary business of great magnitude is dangerous. The management of such a business needs more than common industry

  1. They have not done so. Many of the more important have constituted themselves joint stock companies, and a considerable number of the less important have been absorbed by joint stock banks.