TABLE IX. continued.-Authorised and Actual Circulation of Issuing Banks in England and Wales, 1874. Note.-The numbers placed before the name of each Bank refer to the Weekly Returns of Banks of Issue published in the BANKERS' MAGAZINE, from which this statement is prepared. TABLE IX. continued.-Authorised and Actual Circulation of Issuing Banks in England and Wales, 1874. 56 averaged 90 p. ct. of authorised issue and above 16 21 12 THE SAVINGS BANKS BILLS. THE "Economist" of the 29th May writes on the two kinds of savings banks thus :— The comparative merits of the two kinds of savings banks-the Post Office Banks and the old ones--were elaborately discussed on Thursday night, but one defect, which is common to both of them, was not brought out. Neither of them keeps any reserve of ready cash, and both of them are entirely dependent on the sufficiency or insufficiency of the banking department of the Bank of England. The Government pays to the old depositors of the savings banks 31 and to those in the Post Office 2 per cent. for every sixpence deposited, and, therefore if it kept any large sum unemployed, it would lose much. Accordingly, it invests all that it receives immediately in Consols and similar securities, and, in case of need, it pays these depositors by selling those securities. But suppose a run on the savings banks coincided with a panic in the money market, how could those securities be realised? At such moments there is no purchaser of and no large lender on Consols or similar securities, but the banking department of the Bank of England. No sum worth mentioning can be realised without its aid. The Government, therefore, is entirely dependent on the solvency of that department. All the reproaches which are brought against London and country bankers for their dependence on the reserve of the Bank are applicable to the Chancellor of the Exchequer in his capacity of banker. It is true he holds his money at notice, and this would make it necessary for him to keep less ready cash than other bankers, but then he is so much the largest banker in the country. The £65,673,000 he holds are so much above all ordinary bankers' deposits that it is very serious to remember that he holds no reserve at all. As yet, indeed, only minor evils have happened from this policy. Much loss has been incurred by realising at a low price securities which had been bought at a high price-which all bankers know to be one result of keeping no reserve in ready money; but the worst calamity has not occurred; the securities have always been realised by the Government without difficulty. But this is only because the worst event has never happened. Supposing a period of political alarm-from apprehended invasion, or something similar-to coincide with a Lombard Street panic, a combination very likely to occur as time goes on,-the securities held by the Government as a banker could not be realised except by the Bank's aid, and the Bank might not be able to give that aid at any rate without breaking the law. This consideration was far too much neglected in the discussion of Thursday; but there are two great corollaries from it. First, that the notion that the English Government can "let the money market take care of itself" is wrong, for that Government is the greatest single banker in the money market, and with the least reserve. Secondly, that all calculations as to the profit and loss of the savings banks should take |