========================================================================== 2 Oct., | | 24 Sept.,| 1 Oct., |Increase. |Decrease. 1901. | | 1902. | 1902. | | ---------+---------------------+----------+----------+----------+--------- £ | Liabilities. | £ | £ | £ | £ | | | | | 3,790,617|Rest | 3,804,611| 3,816,736| 12,125| ... 10,874,581|Public Deposits | 8,301,490|10,025,973| 1,724,483| ... 41,204,129|Other Deposits |40,373,382|42,695,526| 2,322,144| ... 143,965|Seven-Day Bills | 192,886| 188,590| | 4,296 ---------+---------------------+----------+----------+ | £ | Assets. | £ | £ |Decrease. |Increase. | | | | | 8,022,103|Government Securities|14,594,260|15,826,080| ... | 1,231,820 7,158,440|Other Securities |26,302,606|31,837,516| ... | 5,534,910 3,308,720|Notes |24,086,105|21,391,145| 2,694,960| 2,077,029|Gold and Silver | 2,242,398|2,225,084 | 17,314| | | | +----------+---------- | | | |£6,771,026|£6,771,026 48⅝% |Ratio | 53·87% | 44·6% | 3% |Bank Rate | 3% | 4% | =========================================================================== Why, it may be asked, is so much importance attached to this return, and why do the critics, each week, endeavour to state precisely how much the "market" has borrowed from, or repaid to, the Bank, and to explain the cause of the various accretions and diminutions in the different assets and liabilities? With regard to the latter attempt, each critic, it is said, is quite convinced that he alone understands the true inwardness of the various movements which result in the increases and decreases recorded in our table; but it is just whispered that those persons at the Bank of England who _know_ the cause laugh at their deductions. The return is of the greatest moment to the public, for the simple reason that it shows the ratio per cent. of the Bank's reserve of notes and cash in hand to its liabilities, and, also, the amount of coin and bullion in the Issue Department. The Bank holds the final reserve; and if demand is brisk and the other bankers have advanced largely to the outside market, the bill brokers are driven to the Bank. As the banking companies have advanced all their spare capital, demand can only be supplied from the reserve at the Bank of England; and the Bank, which must protect its gold, checks demand by charging high rates to all who borrow.