DISTRUST, RUNS AND SUSPENSIONS A great part (probably the greater part) of a bank's liabilities will be payable on demand. No bank keeps enough cash to pay all its demand obligations. It is unlikely that cash and liquid investments together would suffice. Supposing all its customers simultaneously exercised their rights of withdrawing deposits on demand in money, the bank, if left to its own resources, would probably be unable to fulfil its obligations. In general this does not occur. People deposit their money in banks on grounds of con venience, and, so long as the balance of convenience remains, they continue to do so. But a vital condition is that they should feel confidence in the bank. Let them doubt its solvency, and they will immediately demand payment. If something occurs to cast doubt on the solvency of a bank, there will be a run upon it, a simultaneous (possibly panic-stricken) withdrawal of deposits by all or by a large proportion of its customers. The bank's first re source is to turn its liquid assets into money. It must sell them or borrow upon them from other banks. One of the advantages of the central bank system is that the central bank is at hand to afford help to a bank in difficulties. Provided the bank's position is demonstrably sound, the central bank can lend it whatever cash may be necessary to satisfy its depositors. But if that con dition is not fulfilled, the bank may find its cash reserves ex hausted and be compelled to suspend payment. Suspension is not quite the same thing as failure. But it is a breach of the understanding on which credit has been created to serve as a means of payment. For it stops not only the withdrawal of de posits in money, but also the clearing of cheques drawn by the depositors. Legally it is not possible to enforce payment on demand, since a court would always give reasonable time for pay ment (though damages might be given for a default on an obliga tion to pay on demand) . Banks have often been compelled to sus pend payment when they are perfectly solvent in the sense that their assets, when realised, have paid all their depositors and left something over for the shareholders. Suspension can arise in an other way. A country with a gold standard currency may be ex posed to an adverse balance of payments and heavy losses of gold, so that all the banks simultaneously experience a rapid de pletion of their cash not owing to distrust, but because a profit can be gained on exports of gold. If the currency laws are such that the money withdrawn cannot be replaced with fresh supplies (e.g., by increased issues of notes from the central bank), there may be a general suspension of payments by the banks.