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With the Bank of England thus acting as a centre to the system, there
has grown up around it a circle of the great joint stock banks, which
provide credit and currency for commerce and finance by lending money
and taking it on deposit, or on current account. These banks work under
practically no legal restrictions of any kind with regard to the amount
of cash that they hold, or the use that they make of the money that is
entrusted to their keeping. They are not allowed, if they have an office
in London, to issue notes at all, but in all other respects they are
left free to conduct their business along the lines that experience has
shown them to be most profitable to themselves, and most convenient for
their customers. Being joint stock companies they have to publish
periodically, for the information of their shareholders, a balance sheet
showing their position. Before the war most of them published a monthly
statement of their position, but this habit has lately been given up. No
legal regulations guide them in the form or extent of the information
that they give in their balance sheets, and their great success and
solidity is a triumph of unfettered business freedom. This absence of
restriction gives great elasticity and adaptability to the credit
machinery of London. Here is a specimen of one of their balance sheets,
slightly simplified, and dating from the days before the war:--

LIABILITIES.

Capital (subscribed) £14,000,000
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Paid up 3,500,000
Reserve 4,000,000
Deposits 87,000,000