The liabilities of English banks consist al most entirely, first, of the current account balances in their hands, repayable on demand, on which it is not usual to allow any interest, and secondly, of sums deposited repayable at a fixed notice, usually seven days, on which Lon don bankers allow interest at one and a half per cent below the Bank of England discount rate. London bankers also accept, on behalf of their customers, bills drawn from abroad, proper security being deposited to cover the bankers' liability. Their assets consist of cash on hand and at the Bank of England or their London agent, money lent at call or short notice to the money market against security, bills, being the acceptances of other bankers or leading merchants bought in the market, in vestments in first-class stock exchange securi ties, and advances to customers, either in the form of loans, overdrafts upon current account, or bills discounted.
During the middle of the 18th century, Eng land was subjected to a series of acute banking crises, notably in 1847, 1857 and 1866, but if we except the grave situation created in 1890 by the liquidation of Barings, who, it must be noted, were not bankers, the country has been free from such disturbances since 1878.
The outbreak of the European War in Au gust 1914 threw a heavy strain on the banking systems of all countries, neutrals as well as belligerents. It is as yet too early to discuss
the lessons which may be learned from the ex perience gained since that time, but it may safely be said that the British banking system has stood the ordeal well. The worst criticism that has been levelled against it is that bankers displayed a lack of courage in the early days succeeding the declaration of war. Two or three circumstances stand out clearly; first the strength, unexpected in the circumstances, of London's international position at the outbreak of war, when instead of the gold famine ex pected by some, gold poured into London from all quarters. Secondly, the advantage to the country of having its banking resources liquid instead of locked up in trading ventures, where by the maximum financial assistance has been forthcoming for carrying the country through the ordeal of the war. Thirdly, the vigor and efficiency displayed by the Bank of England as the pivot of our whole banking system.
the State,' and 'Foreign Trade and the Money Market.' Banking in Scotland and Ireland.— Kerr,