a merchant have 10,000 L. at his bankers, and wants to pay it to
some one in Germany, he will not be able to pay it unless his banker
can pay him, and the banker will not be able to pay if the Bank of
England should be in difficulties and cannot produce his 'reserve.'

The directors of the Bank are, therefore, in fact, if not in name,
trustees for the public, to keep a banking reserve on their behalf;
and it would naturally be expected either that they distinctly
recognized this duty and engaged to perform it, or that their own
self-interest was so strong in the matter that no engagement was
needed. But so far from there being a distinct undertaking on the
part of the Bank directors to perform this duty, many of them would
scarcely acknowledge it, and some altogether deny it. Mr. Hankey,
one of the most careful and most experienced of them, says in his
book on the Bank of England, the best account of the practice and
working of the Bank which anywhere exists--'I do not intend here to
enter at any length on the subject of the general management of the
Bank, meaning the Banking Department, as the principle upon which
the business is conducted does not differ, as far as I am aware,
from that of any wellconducted bank in London.' But, as anyone can
see by the published figures, the Banking Department of the Bank of
England keeps as a great reserve in bank notes and coin between 30
and 50 per cent of its liabilities, and the other banks only keep in
bank notes and coin the bare minimum they need to open shop with.
And such a constant difference indicates, I conceive, that the two
are not managed on the same principle.

The practice of the Bank has, as we all know, been much and greatly
improved. They do not now manage like the other Banks in Lombard
Street. They keep an altogether different kind and quantity of