The bill-brokers, finding that they cannot obtain the funds from the ordinary sources wherewith to repay the amounts “called” from them, must have recourse to the Bank of England—both for discounting bills and for short loans. These facilities are there granted to them on certain conditions. The accommodation thus granted to the bill-brokers amounts to very large figures when the resources of the Money Market become locked up, owing to some special cause, such, for instance, as the issue of a big loan like the Transvaal loan of May, 1903. For this loan the “application money” alone, in the hands of the Bank of England, amounted to over £35,000,000, the bulk of which had been temporarily taken from the balances of other banks, thus reducing their lending powers and compelling them to call their advances from the bill-brokers. _Notes, and Gold and Silver Coin._—These two items together form what is known as the “Reserve” of the Bank, and the Reserve is the most important item appearing in the Weekly Return, and the item on which the attention of the Money Market is constantly fixed. On looking at the balance sheet of one of our joint-stock banks, we find that the first item appearing among the assets of such an institution is “Cash in hand and Balance at the Bank of England”; but it is impossible to tell from this how much is actual cash, and how much balance at the Bank. The average proportion of “Cash and Bank of England balance” to “liabilities to the public” held by our leading joint-stock banks is about 15 per cent., while the proportion of “Cash” (Notes, and Gold and Silver Coin) to “liabilities” with the Bank of England has averaged 50 per cent. during the last ten years, and the fall of its reserve to anything like 15 per cent. would doubtless be coincident with a world-shaking panic. The reason of this great divergence in the proportion of cash in hand held by the Bank of England in comparison with other banks needs explanation, as do also the means taken to maintain the Reserve at a figure of presumed safety. The “Reserve” is the reserve of the Banking Department only, and has no connection with the Issue Department as regards the convertibility of its notes. The great importance that is attached to the Reserve being maintained at a large figure is due to the fact that not only can this Reserve be drawn upon for home requirements, but that it is open to attack, and serious attack, from abroad.