England, but they did not keep so much reserve as they would have kept if there had been no Bank of England.  For a long time this was hardly noticed.  For many years questions of the ‘currency,’ particularly questions as to the Act of 1844, engrossed the attention of all who were occupied with these subjects.  Even those who were most anxious to speak evil of joint stock banks, did not mention this particular evil.  The first time, as far as I know, that it was commented on in any important document, was in an official letter written in 1857 by Mr. Weguelin, who was then Governor of the Bank, to Sir George Lewis, who was then Chancellor of the Exchequer.  The Governor and the Directors of the Bank of England had been asked by Sir George Lewis severally to give their opinions on the Act of 1844, and all their replies were published.  In his, Mr. Weguelin says: 

’If the amount of the reserve kept by the Bank of England be contrasted with the reserve kept by the joint stock banks, a new and hitherto little considered source of danger to the credit of the country will present itself.  The joint stock banks of London, judging by their published accounts, have deposits to the amount of 30,000,000 L. Their capital is not more than 3,000,000 L., and they have on an average 31,000,000 L., invested in one way or another, leaving only 2,000,000 L. as a reserve against all this mass of liabilities.’

But these remarkable words were little observed in the discussions of that time.  The air was obscured by other matters.  But in this work I have said so much on the subject that I need say little now.  The joint stock banks now keep a main part of their reserve on deposit with the bill-brokers, or in good and convertible interest-bearing securities.  From these they obtain a large income, and that income swells their profits.  If they had to keep a much larger part than now of that reserve in barren cash, their dividends would be reduced, and their present success would become less conspicuous.

The second misgiving, which many calm observers more and more feel as to our largest joint stock banks, fastens itself on their government.  Is that government sufficient to lend well and keep safe so many millions?  They are governed, as every one knows, by a board of directors, assisted by a general manager, and there are in London unrivalled materials for composing good boards of directors.  There are very many men of good means, of great sagacity and great experi-ence in business, who are obliged to be in the City every day, and to remain there during the day, but who have very much time on their hands.  A merchant employing solely or principally his own capital has often a great deal of leisure.  He is obliged to be on the market, and to hear what is doing.  Every day he has some business to transact, but his transactions can be but few.  His capital can bear only a limited number of purchases; if he bought as much as would fill his time from day to day he would soon be ruined,