First, the German Government had a large balance of its own lying at a particular Joint Stock Bank.  That bank lent this balance at its own discretion, to bill-brokers or others, and it formed a single item in the general funds of the London market.  There was nothing special about it, except that it belonged to a foreign government, and that its owner was always likely to call it in, and sometimes did so.  As long as it stayed unlent in the London Joint Stock Bank, it increased the balances of that bank at the Bank of England; but so soon as it was lent, say, to a bill-broker, it increased the bill-broker’s balance; and as soon as it was employed by the bill-broker in the discount of bills, the owners of those bills paid it to their credit at their separate banks, and it augmented the balances of those bankers at the Bank of England.  Of course if it were employed in the discount of bills belonging to foreigners, the money might be taken abroad, and by similar operations it might also be transferred to the English provinces or to Scotland.  But, as a rule, such money when deposited in London, for a considerable time remains in London; and so long as it does so, it swells the aggregate balances of the body of bankers at the Bank of England.  It is now in the balance of one bank, now of another, but it is always dispersed about those balances somewhere.  The evident consequence is that this part of the bankers’ balances is at the mercy of the German Government when it chooses to apply for it.  Supposing, then, the sum to be three or four millions and I believe that on more than one occasion in the last year or two it has been quite as much, if not more—­that sum might at once be withdrawn from the Bank of England.  In this case the Bank of England is in the position of a banker who is liable for a large amount to a single customer, but with this addition, that it is liable for an unknown amount.  The German Government, as is well known, keeps its account (and a very valuable one it must be) at the London Joint Stock Bank; but the Bank of England has no access to the account of the German Government at that bank; they cannot tell how much German money is lying to the credit there.  Nor can the Bank of England infer much from the balance of the London Joint Stock Bank in their Bank, for the German money was probably paid in various sums to that bank, and lent out again in other various sums.  It might to some extent augment that bank’s balance at the Bank of England, or it might not, but it certainly would not be so much added to that balance; and inspection of that bank’s balance would not enable the Bank of England to determine even in the vaguest manner what the entire sum was for which it might be asked at any moment.  Nor would the inspection of the bankers’ balances as a whole lead to any certain and sure conclusions.  Something might be inferred from them, but not anything certain.  Those balances are no doubt in a state of constant fluctuation; and very possibly during the time that the German money was coming in some other might be going out.  Any sudden increase in the bankers’ balances would be a probable indication of new foreign money, but new foreign money might come in without causing an increase, since some other and contemporaneous cause might effect a counteracting decrease.