The question of the proportion which these cash assets should bear to liabilities is one of extreme importance to a prudent banker. It is generally considered that it should be about one-third, but a proportion of reserve to liabilities of only 33 per cent. in the Bank Return would create considerable anxiety, while in an ordinary joint-stock bank’s accounts it would, I fancy, be abnormally great, far greater than that disclosed by the half-yearly accounts submitted to the shareholders, which may naturally be supposed to represent the financial position in the most favorable light. The publication of the weekly Bank Return is so useful and important to commerce, banking, and finance that it is to be regretted that the law which calls for it is not extended to all joint-stock if not to private banks. We might then hope to see an end put to that faulty system of banking which in good times, in order to pay extraordinary dividends, encourages over-trading by giving every possible facility to speculation, and, when a reaction comes, suddenly cuts off all “accommodation,” calls in all resources, and drives its customers to the Bank of England, in the hope of obtaining that ready money which it is no longer willing itself to supply. The Bank of England, through their Banking Department, undertake duties merely towards their own customers and the Government. Their banking business is conducted for the most part (in theory, at all events) on the same lines as any other banking institution. It is unreasonable, therefore, to suppose that it is any part of their duty, in times of panic or crisis, to find ready money for a public shunted over to them by its own bankers, who from an inordinate desire to pay large dividends have placed themselves in a position of inability or unwillingness to find it themselves. And yet some such theory as this is advanced by many well-known writers on banking and finance. Bankers, probably knowing the weak points in their system, become sadly selfish, and are quick to take fright at the first signs of a panic, which they often do much to increase. The suspension of the Bank Act is to them the only true solution of the difficulties caused by over-trading, over-speculation, and inflation of general business. At their earnest entreaty—not at the solicitation of the Bank of England—has the Act been thrice suspended: not, as subsequent events proved, because any suspension of the Act was really necessary, but because bankers hesitated to do their duty to their customers, except under the shelter of its protecting wing. Nothing can be more erroneous, or, indeed, more mischievous, than the doctrine that it is the duty of the Bank of England to keep the “reserve” of the whole country, simply on the ground that, for Clearing House purposes, it suits the convenience of bankers to entrust them with large balances, and because they act as agents for the Government in automatically regulating the note issue of the kingdom.