We can now see that the Bank of England, though it states its minimum rate, is often powerless to transact business thereat; and, recognising that its own rate is out of touch with the market rate, the Bank often discounts bills for its own customers at the rates ruling in the open market, as, were it to refuse to do so, its clients would naturally take their bills to the cheapest house. When, however, Lombard Street is empty, and the bill brokers are compelled to approach the Bank which holds the final reserve, the Bank of England is frequently in a position to charge its rivals one per cent. above its declared minimum, and the bill brokers quite naturally feel a little sore. For this reason they try every source of supply before making application to the Bank. As security against loans made to them the brokers usually deposit either bills which they have discounted in the ordinary course of their business or gilt-edged securities, but sometimes the bill broker's credit is so good that the banks lend him money at call practically without security. When securities are deposited they are of course returned directly the loan is paid off. There is also another little point to which attention may be drawn: to wit--that, although the market we are discussing is a special market, yet if a borrower's credit be good it is generally possible to obtain an advance either at or about Bank rate. CHAPTER XII. The Bank Rate and Stock Exchange Securities. At the present time large advances are made by the banking companies to members of the Stock Exchange, and it is supposed that at the beginning of 1894, when the Bank rate fell to two per cent., and an investment of surplus funds in the London short loan market brought in very poor returns, the banks, tempted by higher rates, largely increased their loans to the Stock Exchange. In 1890 rumour had it that a few of the banks made rather heavy losses in connection with the South American gamble, which brought down the firm of Barings; and the unanimity they displayed, under the leadership of the late Mr. Lidderdale, in supporting the tottering structure, certainly lends force to the suggestion; for philanthropists are not to be found either in Lombard Street or in Gorgonzola Hall. The same rumour was circulated after the Kaffir boom in 1895, and a little later it was whispered that some of the banks intended curtailing their loans to the Stock Exchange, and that in future mining shares would be received with the greatest circumspection. So close is the connection between the banks and the "House" that the utmost consternation prevailed when it was feared that the banks would not touch certain stocks and shares of a fluctuating character. The mere rumour created almost a panic among those dealers whose books were full of the tabooed securities.