But, on the other hand, as we have seen, though the Bank, more or less, does its duty, it does not distinctly acknowledge that it is its duty.  We are apt to be solemnly told that the Banking Department of the Bank of England is only a bank like other banks—­that it has no peculiar duty in times of panic—­that it then is to look to itself alone, as other banks look.  And there is this excuse for the Bank.  Hitherto questions of banking have been so little discussed in comparison with questions of currency, that the duty of the Bank in time of panic has been put on a wrong ground.

It is imagined that because bank notes are a legal tender, the Bank has some peculiar duty to help other people.  But bank notes are only a legal tender at the Issue Department, not at the Banking Department, and the accidental combination of the two departments in the same building gives the Banking Department no aid in meeting a panic.  If the Issue Department were at Somerset House, and if it issued Government notes there, the position of the Banking Department under the present law would be exactly what it is now.  No doubt, formerly the Bank of England could issue what it pleased, but that historical reminiscence makes it no stronger now that it can no longer so issue.  We must deal with what is, not with what was.

And a still worse argument is also used.  It is said that because the Bank of England keeps the ‘State account’ and is the Government banker, it is a sort of ‘public institution’ and ought to help everybody.  But the custody of the taxes which have been collected and which wait to be expended is a duty quite apart from panics.  The Government money may chance to be much or little when the panic comes.  There is no relation or connection between the two.  And the State, in getting the Bank to keep what money it may chance to have, or in borrowing of it what money it may chance to want, does not hire it to stop a panic or much help it if it tries.

The real reason has not been distinctly seen.  As has been already said—­but on account of its importance and perhaps its novelty it is worth saying againwhatever bank or banks keep the ultimate banking reserve of the country must lend that reserve most freely in time of apprehension, for that is one of the characteristic uses of the bank reserve, and the mode in which it attains one of the main ends for which it is kept.  Whether rightly or wrongly, at present and in fact the Bank of England keeps our ultimate bank reserve, and therefore it must use it in this manner.

And though the Bank of England certainly do make great advances in time of panic, yet as they do not do so on any distinct principle, they naturally do it hesitatingly, reluctantly, and with misgiving.  In 1847, even in 1866—­the latest panic, and the one in which on the whole the Bank acted the best—­there was nevertheless an instant when it was believed the Bank would not advance on Consols, or at least hesitated