assets are written down ruthlessly, and they hold, in fact, large hidden reserves owing to the lowness of the figure set against their Advances to Customers, their premises and every other item which gives them an opportunity of exercising a damnatory imagination. They have also a habit of putting away profits earned on sales of investments. The Economist Banking Supplement of May 9, 1925, quoted Mr. Beaumont Pease, of Lloyds Bank, as having told his shareholders that such sales had "yielded substantial profits; but these," he added, "we have not brought into our profit and loss figures, preferring the more conservative method of keeping them in our internal reserves. . . . They are safely there, however, employed in the business, ready for any emergency, earning you extra profits."
The liabilities' side has already been explained, sufficiently for our present purpose, in commenting on the assets. Perhaps it is worth while to add that the tiny item of notes in circulation is a rara avis in the balance-sheet of a leading English bank, since those with London offices are not allowed to issue notes in England, this privilege being reserved to the Bank of England. The notes outstanding in this case represent the circulation of an
