country town the minimum of cash necessary to the transaction of the
current business of that country town. Long experience has told them
to a nicety how much this is, and they do not waste capital and lose
profit by keeping more idle. They send the money to London, invest a
part of it in securities, and keep the rest with the London bankers
and the bill brokers. The habit of Scotch and Irish bankers is much
the same. All their spare money is in London, and is invested as all
other London money now is; and, therefore, the reserve in the
Banking Department of the Bank of England is the banking reserve not
only of the Bank of England, but of all Londonand not only of all
London, but of all England, Ireland, and Scotland too.

Of late there has been a still further increase in our liabilities.
Since the Franco-German war, we may be said to keep the European
reserve also. Deposit Banking is indeed so small on the Continent,
that no large reserve need be held on account of it. A reserve of
the same sort which is needed in England and Scotland is not needed
abroad. But all great communities have at times to pay large sums in
cash, and of that cash a great store must be kept somewhere.
Formerly there were two such stores in Europe, one was the Bank of
France, and the other the Bank of England. But since the suspension
of specie payments by the Bank of France, its use as a reservoir of
specie is at an end. No one can draw a cheque on it and be sure of
getting gold or silver for that cheque. Accordingly the whole
liability for such international payments in cash is thrown on the
Bank of England. No doubt foreigners cannot take from us our own
money; they must send here 'value in some shape or other for all
they take away. But they need not send 'cash;' they may send good
bills and discount them in Lombard Street and take away any part of
the produce, or all the produce, in bullion. It is only putting the