This is only a single additional instance beyond the innumerable ones given, which shows how deeply our system of banking is fixed in our ways of thinking.  The Government keeps the money of the poor upon it, and the nation fully approves of their doing so.  No one hears a syllable of objection.  And every practical manevery man who knows the scene of actionwill agree that our system of banking, based on a single reserve in the Bank of England, cannot be altered, or a system of many banks, each keeping its own reserve, be substituted for it.  Nothing but a revolution would effect it, and there is nothing to cause a revolution.

This being so, there is nothing for it but to make the best of our banking system, and to work it in the best way that it is capable of.  We can only use palliatives, and the point is to get the best palliative we can.  I have endeavoured to show why it seems to me that the palliatives which I have suggested are the best that are at our disposal.

I have explained why the French plan will not suit our English world.  The direct appointment of the Governor and Deputy-Governor of the Bank of England by the executive Government would not lessen our evils or help our difficulties.  I fear it would rather make both worse.  But possibly it may be suggested that I ought to explain why the American system, or some modification, would not or might not be suitable to us.  The American law says that each national bank shall have a fixed proportion of cash to its liabilities (there are two classes of banks, and two different proportions; but that is not to the present purpose), and it ascertains by inspectors, who inspect at their own times, whether the required amount of cash is in the bank or not.  It may be asked, could nothing like this be attempted in England? could not it, or some modification, help us out of our difficulties?  As far as the American banking system is one of many reserves, I have said why I think it is of no use considering whether we should adopt it or not.  We cannot adopt it if we would.  The one-reserve system is fixed upon us.  The only practical imitation of the American system would be to enact that the Banking department of the Bank of England should always keep a fixed proportionsay one-third of its liabilitiesin reserve.  But, as we have seen before, a fixed proportion of the liabilities, even when that proportion is voluntarily chosen by the directors, and not imposed by law, is not the proper standard for a bank reserve.  Liabilities may be imminent or distant, and a fixed rule which imposes the same reserve for both will sometimes err by excess, and sometimes by defect.  It will waste profits by over-provision against ordinary danger, and yet it may not always save the bank; for this provision is often likely enough to be insufficient against rare and unusual dangers.  But bad as is this system when voluntarily chosen, it becomes far worse when legally and compulsorily imposed.