Bills discounted represent another form of the highest wealth of the community, and the banks still adhere to the soundest principles in discounting them. These bills represent that class of wealth that has to satisfy the most enduring desires of the human race. Here, then, we see the best judgment at work. There are, of course, many varieties of bills of exchange. They may be placed in different classes, or categories, according to their endorsements. What is called in the market the “finest” bills are those endorsed by the leading banks, and they are called clearing bank acceptances. Banks accept these bills for small commissions, and they are more readily discounted then in the market, simply because they have behind them the highest class of wealth. Then there are bills accepted by merchants and other houses or firms which are not of the standing of the clearing banks. They are of an inferior category. The value of the acceptances and endorsements, and therefore the value of the bills, depends greatly upon the standing or reputation of the acceptors. Now the banks discount, as a rule, only the “finest” bills, that is, the bills with the most reliable acceptances, bills accepted, say, by other banks. In exercising this discrimination they exercise the soundest judgment, and nothing higher can be expected of them. Such bills as these are readily discountable at the Bank of England, and there is no sound reason why, in certain given circumstances, they should not be discounted even by the Government through the agency of the Bank of England. It might be in the interests of the country to do this, especially as the machinery could immediately be set in motion. And if the machinery could be set in motion immediately, then the bills should be as good a reserve as legal tender. It is to be believed, too, that the soundest judgment is shown in the selection of the composite wealth aggregated under loans and advances. These represent the largest aggregate asset, but, at the same time, they represent the greatest proportion of the loan-deposits, deposits repayable to the bank. Such loans as these should be made of very short duration, renewable, of course, but renewable for short periods. Is it possible to make some kind of legal provision whereby in the event of a remote disaster such as a panic these deposits, representing liabilities to a bank, should be discriminated against and not be withdrawable on demand? Could not the position be made clearer, as I have hinted already, by segregating the deposit and current accounts? Were this hint adopted the amended balance sheet would appear somewhat as follows:--