Of this vast accumulation of capital held by bankers—amounting in the United Kingdom to some £800,000,000—a certain part is retained in actual cash, besides a balance which is kept with the Bank of England or a London agent, some is invested in securities, and the balance is used in lending to those that require the use of further capital for their business or private needs. Of this balance so lent, a large percentage is advanced to individual customers by way of loan, overdraft, or in the discounting of bills; and the remainder is used in the Money Market proper, or what has been aptly called “The Short Loan Fund.” The rate of interest which private individuals have to pay for advances from time to time is largely based on the prevailing official rate of the Bank of England as regards loans, and on the “market rate” as regards the discounting of first-class bills. For the greater part of the money in a banker’s hands no interest whatever is paid, that is, for practically the whole of the current account balances. For the remainder, the money on deposit, only a small interest is paid; but a banker must always keep before him the fact that nearly all his liabilities are repayable in cash on demand. Thus he must _always_ keep himself prepared for eventualities, and his first line of defence consists of cash and balance with the Bank of England or London agent, and he reckons his advances to the Money Market as his next most quickly convertible and available asset. For the money advanced to the Money Market bankers are content to receive a low rate of interest, provided that the advances are absolutely safe, and can quickly be called in when necessary. These conditions can be obtained by lending money at “call” (that is, repayable on demand) or at a few days’ notice to the bill-brokers, who deposit as security for such loans, first-class bills, or certain of the highest class of securities, such as Consols, etc. The bill-brokers and discount houses of London form the second most important factor in the Money Market. These firms and institutions practically act as middlemen or intermediaries. Many of them possess large capital themselves with which to conduct their business, but the bulk of the funds which they employ consists of borrowed money. This money is borrowed from various sources; the greater part from the banks, some from the India Council, and some from our merchant princes and finance houses, who of themselves really constitute another factor in the Money Market. Besides these sources for borrowing money, the bill-brokers further increase their working funds by receiving money on deposit from the public. With the funds so collected they buy bills, usually only those of a first-class character, and these they either hold until maturity or rediscount with the banks, and occasionally with the Bank of England.