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established since 1862. Thanks to the work of the late
Henrik Borgström, some of the most important
characteristics of the excellent Scotch banking system
were introduced into Finland by the establishing of
the Union Bank or “Föreningsbanken i Finland.” We
all know how their banking system, together with their
schools, have transformed the Scotch since the middle
of the eighteenth century from a barbarous nation to
probably the first people in the world. The banks in
Finland resemble more than those of any other country
the banks of Scotland. As in Scotland so we find in
Finland a few large, well-organised banks with numerous
branch offices; four banks have at present 115 branches
in forty different places, whereas in 1887 there were
only fifty-nine in twenty-nine places. A few larger
banks can be stronger and better managed than a
great number of small banks; while, through their
branches, a distribution of capital takes place in the
different parts of the country, and the rate of interest
and discount is equalised. A few banks need also
much less cash. Another illustration of this system is
offered by Canada. Compared with the 4000 national
or note-issuing banks of the United States, which are
not allowed to establish branches, the twelve Canadian
banks are much stronger and the rates of interest and
discount are much more equal, to the great benefit
of both lenders and borrowers, and to the special
advantage of the new districts which most need capital.
Sweden has, to some extent, the same system; with
the difference, however, that even the largest banks
with their branches hardly hold the same independent
position with regard to the Riksbank as do the Finnish
banks, especially the three largest. The Scotch “cash
credit” was adopted at once by the Bank of Finland as
soon as the first private bank contemplated the
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