BANKING ORGANIZATION Branch Banking.—The establishment of branches enables one bank to do business over a wide area. It thereby becomes possible for the whole of the banking business of a great country to be concentrated in the hands of a small number of banks. Branches give better facilities for payments between one place and another. If such payments have to be made through correspondents a charge will probably be made in the form of a small (but vex atious) commission, Mere magnitude is itself an advantage to a bank. The bigger the bank, the more effectively the law of aver ages applies to its transactions and in particular to its losses. If the losses to be guarded against are a smaller proportion of the total assets, then a smaller proportion of capital will give the same security to depositors, or a given proportion of capital will give greater security. In the United States, where branch banking is prohibited except on a very restricted scale, hundreds of little banks fail every year. The big bank can also give better facilities to the big customer. A trader whose balances and borrowings are considerable in proportion to the total resources of the bank is difficult to deal with. His transactions may sometimes upset all the banker's calculations. But if the trader can find a banker who has many customers doing business on the same big scale, their transactions will become subject to the law of averages. The re sult is a tendency for the big banks to absorb the little ones, or for many little banks to combine and form a few big ones where ever branch banking is permitted. The process has gone farther in England than anywhere else, and it has come to be recognized that it ought not to proceed indefinitely. There is no apparent stopping place short of the union of all banks into a single mo nopoly. Such a monopoly could hardly be left in private hands and the result would be the nationalization of banking.