TABLE I. Continued-BANK

ANNUAL AVERAGES OF THE TRANSACTIONS OF THE

NOTE. It was notified on the publication of the Return of the Bank of England for the week ending Wednesday, January 8, 1873, that, with regard to the Deposits in the Return then issued, the practice was commenced of placing the Chancery Balances under the head of Government Deposits instead of under that of the ordinary Deposits of the public as heretofore. The average amount is about £1,000,000, and to that extent, therefore, the respective totals have undergone transposition. This must be borne in mind in comparing the amounts of the Private Deposits from 1844 to 1872, and from 1873 onwards.

NOTE. During the years 1844-53 the Bank always held a proportion of Silver Bullion This is included in the amounts given in Col. 33 of this Table. The stock of Silver thus held is shown in Table XIV., page 126.

Average of Bullion 2 per cent. more than Liabilities.

† Average of Bullion nearly 1 per cent. more than Liabilities. Average of Bullion 3 per cent. more than Circulation.

CHAPTER II.

THE DEPOSITS HELD BY THE BANK OF ENGLAND, AND THE RESERVE OF THE BANK OF ENGLAND.

We will now proceed to the examination of the tables, which are drawn up for the purpose of assisting us to form a complete analysis of the accounts of the Bank of England. The Capital of the Bank of England is the largest of any known bank in the world, and amounts to £14,553,000; the Rest, or accumulated and undivided profit, averages about 3 millions more. The total capital available belonging to the Bank, without taking the note issue into consideration, is therefore about 171 millions. Col. 9 of Table I. contains the yearly average of the total deposits of the Bank of England. Col. 1 contains the yearly average of the total liabilities of the Bank of England on deposits and Bank post bills. From this point of view we need not take the Bank note circulation into account, as that concerns the Issue Department and not the Banking Department of the Bank of England; the only liabilities, therefore, which have to be taken into consideration besides the deposits are the seven-day and other bills. These have declined recently. From averaging more than £1,000,000 in

1844, they have diminished to less than £300,000 in 1878. In consequence, it will be observed that the amounts in col. 1 do not very greatly differ from those in col. 9, for the last ten or twelve years. To render the statement more clear, a column marked 2 has been added, in which the proportion is given which the amounts of the total liabilities under these heads bore to that in 1844. By looking down these columns we shall see that it has not been till within the last eighteen or twenty years that the average deposits of the Bank have exceeded, or much exceeded, its capital; even at the present date the deposits are only about equal to twice the capital. This is a very unusually strong position for any bank to occupy. The capital of most banks bears generally but a comparatively small proportion to the deposits. In Scotland the proportion has of late years been about one-sixth. In England a proportion of an eighth, or even smaller, is not unusual. The position of the Bank of England, therefore, in this respect is unusually and exceptionally strong. During the time under our notice a very considerable increase in the deposits and liabilities of the Bank has taken place. The liabilities, which averaged about 14 millions in 1844, averaged more than 29 millions in 1878, having thus doubled in the course of that time; and this growth, as will be seen by a reference to the table, has been gradual and continued. In a similar manner, though not in a like proportion, the average reserve has increased. The annual average of the reserve, with a statement of the proportion each year bears to 1844, will be found in cols. 13 and 14. The average reserve, from being 84 millions in 1844, has increased to 11 millions in 1878. In col. 15 is given the average proportion of reserve to the liabilities on deposits and Bank post bills. This is generally very considerable. It has been as high as 63 per cent. in 1852; it was as low as 30 per cent. in 1866. It rose in the next year to 49 per cent., and has never averaged less than 41 per cent. since, till 1878, when the proportion was only 37 per cent. In looking down col. 15,