~(2) Another Cost in Bank-Made Currency.~--The loan rates of the bank must also provide a fund to cover its costs of administration--salaries, clerk hire, rents, and the like. Where transactions run in large units the ratio of expense to the volume of business may be low. This is in part the explanation for the low rates of discount in the great financial centers compared with the rates outside. Credit currency has its cost of production rate as truly as any other service upon the market.... THE RELATION BETWEEN LOANS AND DEPOSITS [35]The money of modern English commerce and finance is the cheque, and the credit dealt in in the London money market is the right to draw a cheque.... Now that we have come to the point at which the manufacture of the right to draw cheques has to be made as clear as may be, it will be well to come into close touch with the facts of the case and look at a bank balance-sheet of to-day. In order to get a fair average specimen I have taken the latest available balance-sheets of half a dozen of the biggest London banks, and put their figures together.... Let us examine the aggregated specimen that I have drawn up. _Millions of L_ Capital paid up 16 Reserve Fund 11 Current and deposit accounts 249 Acceptance on behalf of customers 16-1/2 Profit and Loss account 1-1/2 ------- 294 _Millions of L_ Cash in hand and at the Bank of England 43 Loans at call and short notice 27-1/2 Bills discounted and advances 153 Investments 48 Liability of customers on acceptances 16-1/2 Premises 6 ------- 294 The above statement does not include the figures of the Bank of England, but is an agglomeration of the balance-sheets of six of the biggest of the ordinary joint-stock banks.