_Cr._ £ _s._ _d._ £ _s._ _d._ By Cash in Hand and at the Bank of England 5,996,667 14 8 By Money at Call and Short Notice 5,674,476 5 1 ----------------- 11,671,143 19 9 By INVESTMENTS-- Consols and other Securities of, or guaranteed by, the British Government, of which £35,000 (Stock) is lodged with public bodies 2,488,966 12 6 By Indian, Colonial Government and other Securities 3,771,738 10 11 ----------------- 6,260,705 3 5 By Bills Discounted 6,811,870 13 8 By Loans, Advances, other Accounts and Securities 16,218,748 12 6 By Liabilities of Customers for Acceptances as per contra 3,153,328 7 11 By Freehold and Leasehold Premises 1,025,252 10 11 ------------------- £45,141,049 8 2 =================== On the liability side the capital issued is the amount paid up by shareholders, capital which the bank has employed in the ordinary course of its business. It represents a contingent liability to these shareholders, who have invested their capital for the sake of the return in the shape of dividends. The large sum of thirty-seven and a half millions is the most important item. This is the real working capital of the bank. It is apparently the aggregate amount deposited by the public with the bank. This is what the bank owes to its clientele. But the deposits are not solely money actually placed with the bank. This huge sum includes the loans the bank has made to other customers, to its borrowers. Every loan makes an additional deposit. The man who borrows a sum of money from the bank is credited with that sum and the credit appears in the current accounts. The bank has security for this loan, and, as already pointed out, this security is liquefied into bank currency. Cheques can at once be drawn against it so long as the loan runs and cheques are the country’s currency. Securities, therefore, have been converted into national currency and indirectly into legal tender. The more, therefore, a bank lends the more do its deposit and current accounts grow.