the licensee would conduce to the trade being carried on in a less moral and public-spirited way than the present. Nor does any part of the financial reform here indicated contain the prime demerit of novelty. The local character of licences is already recognised. In 1835, Lord John Russell proposed to transfer the patronage from the justices of the peace to town councils. In 1871, Mr. Bruce's Licensing Bill, brought forward on behalf of the Government of the day, and providing for a ten years' notice and no compensation to existing licensees, contained a clause (13) which ran as follows:

"Where a new publican's general certificate is to be granted. for any licensing district, the same shall be granted to the person who offers by tender to pay for the same during the continuance of the certificate, the highest annual percentage on the annual value of his premises."

So that if the Bill of 1871 had passed, and the proceeds of the licences had been devoted to local purposes, it may confidently be asserted that at the present moment no complaint would be heard from one end of the kingdom to the other of the intolerable burden of rates.

And yet our so-called financiers shake their heads solemnly over the increase of local and imperial expenditure, and tell the people that the only possible means of providing more revenue is by resorting to octrois and a protective tariff.

F. W. HIRST

BANK RESERVES.

OUR refined system of payment by cheque and by clearing is an incalculable benefit to our commerce, and the general soundness and prudence of the management of British banks cannot too strongly be maintained, but, is this great banking system based on ample cash reserves? That is a banking, not a currency, question, a matter of proportion. Whatever the basis of currency, the question for oankers to consider would still be how muchwhat percentage? The total deposits of the banks of the United Kingdom at the end of 1898-excluding the Bank of England— were given in the Economist of May 20 last at 770 or 780 millions, or, including the Bank of England, at 810 or 820 millions. These are the deposits of the internal banks, English, Irish, Scotch, or Manx. They have about 5,800 offices open, and hold "cash on hand, and money at call and short notice" estimated at £226,623,802. There is a vital distinction between "cash" on hand and money at call.

The figures are detailed, with other relevant information, in the following:

Table 1. Amount of deposits British banks.

Table 2. Leaves out the Irish, Scotch, and Manx banks, and gives the figures for the English banks.

Table 3. Is the Statement of the Issue Department Bank of
England, May 17, 1899, with comments.

Table 4. Is part of the statement of Banking Department, Bank of England, May 17, 1899, with comments. Tables Nos. 1 and 2 give us the nearest approximation to the deposit liabilities, and (without separation of the items) of the provision (including "money at call and short notice ") which the banks make to meet their liabilities. These items are shown first for the banks of the United Kingdom, second for the English banks alone.

Tables Nos. 3 and 4 will enable us to make the division between

"cash on hand and at Bank of England, and the item "money at call and short notice" in the balance-sheets of the English banks. We then want to eliminate, as far as possible, the items. money at call and short notice "-equal-market credits-that are duplicated in the balance-sheets of the English banks on the one hand, and of the Scotch, Irish, and Manx banks, and of the

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To the influences controlling the London Money Market must be added the financial houses not included in the lists of Bankers, e.g., the Rothschilds, the bill brokers, the merchant bankers, the private foreign banks, &c., &c., and the Stock Exchange.

1 Notes in reserve.

2 These items include cash at London bankers, in foreign countries, bullion in transit, and are quoted simply that the fact that the foreign and colonial joint stock banks have money-an unknown quantity-employed on the London market, may be kept in mind.

TABLE 3.-ISSUE DEPARTMENT, BANK OF ENGLAND, MAY 17, 1899.

In the Banking Department, Bank of England (reserve of notes).. 17,218,830
In the hands of the public, including the Banks of England and
Wales

27,681,830 £44,900,660

TABLE 4.-BANKING DEPARTMENT, BANK OF ENGLAND PART OF RETURN

Public deposits including

MAY 17, 1899.

Exchequer, Savings Bank, Commissioners of National Debt, £11,457,538 and Dividend Accounts.

Other Deposits including

(a) London Clearing Bankers' Balances.

(b) Bankers' Balances in the towns where the Bank of Eng

land has branches, viz. :-Birmingham, Bristol, Hull, 37,461,629
Leeds, Liverpool, Manchester, Newcastle, Plymouth,
Portsmouth, and balances of Irish and Scotch Banks.

(c) Balances of private firms and corporations.

Foreign banks, and of the Colonial banks having offices in London, on the other hand.

I ask, may we not assume as a rough working rule that money at call and short notice" set out in the balance-sheets of the Scotch, Irish and Manx banks, and of the Foreign and Colonial banks having offices in London, will be part of the deposits of the English-and particularly the London-banks, and will swell the total of their liabilities, and for this reason the bulk "of call and short money" is employed in London. On this basis we get rid of the duplication, and, with the help of Tables 2, 3, and 4, can arrive at the maximum amount of actual cash it is possible for the English banks to hold, and the difference will be "money at call and short notice "-or market creditsbelonging to the English, Scotch, Irish, and Manx banks, and to the Foreign and Colonial banks having offices in London.

I admit that the process might be carried further by an analysis of the balance-sheets of the London banks, but broad figures are safest for our purpose. There are many things which

militate against the complete accuracy of the figure I am about to quote as the total of "money at call and short notice "-or market credits-for instance, moneys with the discount houses, but for practically measuring the adequacy of our bank cash reserves the estimate is near enough to the truth.

Let us consider the following question: "In what form can English banks hold cash?"

The answer is simple.

Gold (sovereigns and half-sovereigns), Bank of England notes, silver, and money at the Bank of England.

Take the items:

Gold-estimated to be held by English banks, 10 to
12 millions, say

Bank of England notes-actual issue in the hands of
the public, including the banks, on May 17, 1899 ...
Total other deposits, Bank of England, on May 17, 1899
Total possible amount of fund from which "cash on
hand and at Bank of England" on May 17, 1899,
could be drawn

"Money at call and short notice"

Being the total of "cash on hand and money at call
and short notice," in hands English banks, per
Table 2

There is no evading the first figure, total possible cash on hand fund £77,142,889, but it remains for us to make necessary deductions in the light of such evidence as we possess.

I submit the following as an approximation to the truth :

These are the details of the ultimate fund (plus the Bank of England reserve, £19,320,156), to which the English banks, and the banks whose "money at call and short notice" is in London must look for the means of paying any urgent liabilities.

As to necessary deductions from the available cash resources of the English banks, we should bear in mind that money at the Bank of England to meet clearing balances, either the clearing balances of the London banks or the balances of the provincial