GREAT BRITAIN. 176 GREAT BRITAIN. been the leading exiiort from the English South African [Xisscssions, and it is also extensively im- ported from Australia. Shipping. The extension of the British Empire and of its inlluence is developed largely through the instrumentality of British shipping; and the maintenance of a merchant navy is considered an essential feature of Great Britain's commercial and Imperialistic policy. The rise of British shipping dates from the time of the Mercantilists. (See Co.MMERCE aboe.) The series of Naviga- tion Laws in the seventeenth century were in- tended to give Britain's vessels a maximum of the carrying trade. Fishing was encouraged in order to train men in a seafaring life, and great pains were taken with marked success by the Government to develop skill in ship-building. The naval victories in the wars with Napoleon gave British vessels almost a complete monopoly in the carrying trade of the world. About that time, however, British shipping began to have a formidable rival in the American mer- chant fleet. Favored by superior American forest resources, our fleet developed very rapidly, until its tonnage in 18G0 almost equaled that of Great Britain. The American Civil War and the change from wood to iron in the construction of vessels resulted, however, in gi'eatly benefiting the shipping of Great Britain and almost ruin- ing that of the United States. At present the tonnage of Great Britain is over ten times that of the United States, and is larger than the combined tonnage of all the rest of the world. In 1897, 57 per cent, of the ocean carry- ing trade of the United States was in British ves- sels. Over 40 per cent, of the external trade of China is carried in British ships, and they hold foremost rank also in the trade with Japan. Two-thirds of the vessels passing through the Suez Canal are British. In 1900 there were en- gaged in the home and foreign trade, not including vessels employed on rivers and in inland navi- gation, 7480 sailing vessels, with 1,989,000 ton- nage, and 7455 steam vessels, with 7,405,000 ton- nage. The sailing vessels decreased from 11,570 during the decade, but the decrease in tonnage ■was not so great. The steam vessels increased in number during the same period from 5855. and the tonnage from 5.021,000. The number of seamen afloat on British ships ■ is estimated at 235,000. In 1902 two of the British steamship lines, Tepresenting but a small part of the total British shipping, entered a combine controlled by Ameri- can capital. They will continue to sail, however, under the British flag. The incident gave rise to significant questions as to whether this was the beginning of a policy that might later in- volve a large part of British shipping, and what the attitude of the British Government would be toward this transaction. Shipping has been greatly facilitated by e.Ktensive river and harbor improvements — as, for instance, by the broaden- ing of the river Clyde to Glasgow, and the con- struction of the ship canal to Manchester. London continues to hold supremacy, not only over Brit- ish, but over all the ports of the world. It has an advantage in being the best railway distribut- ing centre in England. It receives and distrib- utes the greater portion of the Continental and Oriental trade. Cardiff, as a result of its grow- ing exports of coal, is now next to London in the amount of its aimual shipping tonnage. Liv- erpool, rankintr ne.xt, is favored by its position for the trade with America, of which it has the greater part. Other important ports are New- castle, North and South Shields, Hull and Grims- Tjy, Leith, Glasgow, and Southampton. B.NKING. Banking was introduced into Great Britain by the goldsmiths of London in the sev- enteenth century. The banking systems of Eng- land and Scotland have developed independently and naturally alnng somewhat divergent lines. In England the first connection of the Govern- ment with banking occurred in 1694, when the financial exigencies of the nation made necessary the advancement of a loan, and the Bank of England was chartered in order that a loan might be secured. This bank, through special privileges granted it by the Government — as, for instance, giving it the management of the national debt, making it the bank of the Government, allowing it luitil 1826 the privilege of being the only joint- stock bank in England, and granting it the power to issue notes — has attained an overshadowing prominence among the banks of that country, and even among the banks of the world. The mo- nopoly rights of course implied restrictions on other banks, so that provincial banking in Great Britain is generally admitted to have been inad- equately provided for. The Bank of Scotland was organized one year later (1695) than the Bank of England, and it, too, at fir.st (for twenty-one years) enjoyed monopoly rights; but, unlike the English bank, it did not secure a renewal of its patent rights. This gave an opportunity for the growth of other banks, which have coliperated to secure a uniform system of banking throughout Scotland. The form.ation of joint-stock com- panies was also permitted with liberal priv- ileges in the matter of issuance of notes. The authorized note issues of Scotch banks may be exceeded, providing there is a specie reserve equal in amount to the excess of the issues, a precaution which, of course, strengthens the cir- culation. This reserve is considered as part of the cash balance of the bank. The Scotch banks do not lose their rights of issue in Scotland when they open offices or branches in London or in the English provincial towns. In England laws were passed in 1826 which admitted the establish- ment of joint-stock banks beyond a raditis of 65 miles from London, the number of partners not to exceed six. This number was increased in 1862 to ten, except for banks of issue; they are still limited to six. By the Bank Charter Act of 1844 the issue de- partment was separated from the banking depart- ment of each bank, and the issue of bank-notes was limited to those banks already exercising that privilege. These institutions were restricted to a fixed issue, and if they established themselves within a radius of 65 miles from London they forfeited their rights to issue notes. Under these laws the number of note-issuing banks is decreasing, and this function will probably be- come the exclusive right of the Bank of Eng- land unless the laws are changed. The Bank of England notes are legal tender for all sums over £5 except at the bank and its branches, and in Scotland and Ireland. The English and Scotch bankers pursue ditTerent policies in matters of interest and commission, the English being in- clined to cut rates and to underbid for business, while the Scotch adhere to uniform terms in ac- cordance with an agreement between them. The
