The years 1894 and 1895 were distinguished by cheap money and indifferent trade, therefore we should expect to see the Bank's dividends decrease, and its stock fall in sympathy with diminishing distributions. If we glance at the table we shall see that our deductions were realised. In 1896 trade began to improve. Rising prices lessened the purchasing power of money; consequently the industrial machine required more capital _after_ the rise, because a given sum would then purchase _less_. The result was an increased demand for loanable capital, which at once became dearer; and the Bank of England, together with the other banks in the country, earned more. Again, as one would have expected, dividends and stock moved up together. During 1897 the same movements were witnessed; but in 1899 Bank stock began to fall, although distributions were maintained. This deviation from rule evidently calls for explanation. Compare, for instance, the prices of the shares of the undermentioned banks during the period in question:-- =============================================================== | | | | | 1895. | 1899. | 1900. | | | | | | | | | ---------------------------------+--------+---------+---------+ | | | | London and County--_Highest_ | 95½ | 109½ | 107 | | | | | " " " _Lowest_ | 89½ | 103 | 101½ | | | | | London and Provincial--_Highest_ | 21¾ | 22½ | 22¾ | | | | | " " " _Lowest_ | 19¼ | 21 | 21½ | | | | | London Joint Stock-_Highest_ | 34¼ | 39 | 37⅞ | | | | | " " " _Lowest_ | 30⅞ | 33¼ | 34 | | | | | =============================================================== ======================================================== | | Dividend % | 1901. | per annum | | each year | | since 1898. ---------------------------------+---------+------------ | | London and County--_Highest_ | 107 | 22 | | " " " _Lowest_ | 100¼ | | | London and Provincial--_Highest_ | 23⅜ | 18