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monopoly still made it impossible for any Joint
Stock Bank to issue notes in the London district.
l is thus evident that deposit .banking was already
well founded as a profitable business when Peel,
and Parliament behind him, thought that they
could sufficiently regulate the country's banking
system so long as they controlled the issue of notes
by the Bank of England and other note-issuing
banks. It is perhaps fortunate that Parliament
made this mistake, and so enabled our banking
machinery to develop by means of deposit banking,
and so to ignore the hard-and-fast regulations laid
upon it by Peel's Act. This, at least, is what has
happened; only in times of acute crisis have the
strict regulations of Peel's Act caused any incon-
venience, and when that inconvenience arose the
Act has been suspended by the granting of a letter
of indemnity from the Treasury to the Governor of
the Bank.

Under Peel's Act the present rather anomalous
form of the Bank of England's Weekly Return was
also laid down. It shows, as all men know, two
separate statements; one of the Issue Department
and the other of the Banking Department. The
Issue Department's statement shows the notes
issued as a liability, and on the assets side Govern-
ment debt and other securities (which are, in fact, also
Government securities), amounting to 18,450,000
as allowed by the Act, and a balance of gold. The
Banking Department's statement shows capital,
" Rest " or reserve fund, and deposits, public and
other, among the liabilities, and on the other side