Some of those deposits too are of a peculiar and very distinct
nature. Since the Franco-German war, we have become to a much larger
extent than before the Bankers of Europe. A very large sum of
foreign money is on various accounts and for various purposes held
here. And in a time of panic it might be asked for. In 1866 we held
only a much smaller sum of foreign money, but that smaller sum was
demanded and we had to pay it at great cost and suffering, and it
would be far worse if we had to pay the greater sums we now hold,
without better resources than we had then.

It may be replied, that though our instant liabilities are great,
our present means are large; that though we have much we may be
asked to pay at any moment, we have very much always ready to pay it
with. But, on the contrary, there is no country at present, and
there never was any country before, in which the ratio of the cash
reserve to the bank deposits was so small as it is now in
England. So far from our being able to rely on the proportional
magnitude of our cash in hand, the amount of that cash is so
exceedingly small that a bystander almost trembles when he compares
its minuteness with the immensity of the credit which rests upon it.

Again, it may be said that we need not be alarmed at the magnitude
of our credit system or at its refinement, for that we have learned
by experience the way of controlling it, and always manage it with
discretion. But we do not always manage it with discretion. There is
the astounding instance of Overend, Gurney, and Co. to the contrary.
Ten years ago that house stood next to the Bank of England in the
City of London; it was better known abroad than any similar firm
known, perhaps, better than any purely English firm. The partners
had great estates, which had mostly been made in the business. They