88 OUR BANKING MACHINERY

by bills of exchange, the situation would be regarded
as normal, but if, owing to abnormal circumstances,
the Bank desired to increase the amount of notes
issued against bills of exchange only and to reduce
the ratio of its gold or its cash balance to its notes, it
would, at any time, be enabled to do so by the pay-
ment of a tax, without going through the humiliating
necessity for an appeal to the Treasury to allow it
to exceed the legal limit.

At the same time, by the abolition of Peel's Act
the cumbrous methods of stating the Bank's position,
as published week by week in the Bank Return,
would be abolished. The two accounts would be
put together, with the result that the Bank's position
would be apparently stronger than it appears to be
under the present system, which makes the Banking
Department's Return weak at the expense of the
great strength that it gives to the appearance of
the Issue Department. This will be shown from the
following statement given by Sir Edward Holden of
the Return as issued on January i6th, and as
amended according to his ideas :—

BANK STATEMENT, JANUARY 16, 1918.

ISSUE DEPARTMENT.

Notes Issued . . £76,076,000 Gold......£57)626,000

Government Debt „ . 11,0x5,000
Other Securities. , . 7,435,000

£76,076,000 £76,076,000

Ratio of Gold to Notes Issued =8757 per cent.

BANKING DEPARTMENT,

Capital.....£14,553,000 Government Securities . . £56,768,000

Rest......3,363,000 Other Securities .... 92,278,000

Deposits— Notes . . £30,750,000

Public £41,416,000 Gold and Silver 1,143,000

Other 121,589,000

_---------- 163,005,000 --------------3T,893,ooo

Other Liabilities . . . 18,000

£180,939,000 £180,939,000

Ratio of Cash Balance to Liabilities «ay*6 per cent.