Page:The Bank of England and the State, 1905.djvu/27

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The Bank of England and the State.

We now come to the banking deposits outside the Bank of England. What the deposits of private banks were in 1844 it is very difficult to ascertain now, and this would be an interesting subject for a separate enquiry; but as the private bankers did not allow interest on Deposits, and country bankers looked on their note issues as their main source of profit, the amount cannot have been of vast magnitude. In 1847[1] the deposits of the public with the joint stock banks in London are stated to have been £8,850,000. The Return of September 7th, 1844, shows that London bankers kept at the Bank of England balances amounting altogether to £960,000. In 1876 the annual average of bankers' balances with the Bank of England was £11,850,000; in 1877, unfortunately, the practice of making a separate return of the London bankers' balances was discontinued by the Bank of England, a step much to be regretted and never explained, perhaps accounted for by the fact that, as pointed out by Mr. Palgrave, in October, 1877, the amount of the London bankers' balances actually exceeded the total reserve of the Bank of England, as it had done on two previous occasions. Precise information is therefore lacking on that important point, but the inference seems justified that the amount must now be considerably larger than in 1876.

Owing to the number of amalgamations and country banks coming into London, and London bankers going into the country, no exact comparison of their figures can be made, nor is it necessary for the purposes of our argument, which is that while the deposits of the joint stock and private banks of the United Kingdom have, during the 60 years, grown in a gigantic fashion, the figures of the Bank of England (if we deduct the bankers' balances) and the central stock of bullion, show only a comparatively slight increase. We all know how enormous the aggregate banking deposits of the United Kingdom now are, but it is important to keep the figures before us, and according to the last

  1. This is the nearest date for which I have been able to obtain the figures.