While allowing that the great majority of our banks are prudently managed, it must be granted that banking history is a remarkably stormy one, though it is equally true that the surface of the waters has been but little ruffled during recent years; still, the Baring crisis of 1890 is not yet ancient history; and seeing that the banks are intimately connected with the Stock Exchange, the bill-brokers and the commercial community, a person who predicts that a British bank will never again be in difficulties must be blessed by the Almighty with a most sanguine temperament, for such a prediction is altogether opposed to the weight of evidence adduced by the past, and though its fulfilment is eminently desirable, so peaceful a solution of the banking question seems highly improbable. In Chapter II, on the choice of a banker, an attempt was made to show why a customer should select a strong institution whose working resources are plentiful, and whose reserve of liquid assets is large enough to enable it to meet a drain of deposits during a run or a panic. The shareholder who guarantees the customers of a bank against loss to a limited extent will naturally take care that he is a partner in a company which maintains an adequate reserve of cash and securities as an insurance fund against those accidents which are quite beyond the control of the most able board of directors. A shareholder, say, holds twenty-five shares in a bank. These shares are for £80 each, and the amount paid up upon each is £20. He, then, receives a dividend upon £500, and incurs a liability of £1,500. But he bought these £20 paid shares at such a price that they only yield him 4½ per cent., and he certainly cannot afford to run any great risk for such a return; so he therefore, before purchasing, took care that the bank held a large accumulation of cash and gilt-edged securities as a reserve fund against those banking risks for which he pledged £1,500 of his fortune. Every prudent man should take the same precaution. The following illustrations, which are taken from the balance-sheets of two English joint-stock companies that need not be named, will clearly demonstrate that there are banks--and banks. An English Provincial Bank. Liabilities to the public upon current, deposit and other accounts are given in the balance-sheet as £4,200,000. The bank’s liquid assets are thus described:-- Ratio per cent. of liquid assets to public liabilities of £4,200,000. £ £ Cash in hand, at call and at short notice 582,750 13·8