Page:Bankers and Credit (1924).pdf/36



Bankers had to decide in the light of their long experience of these matters, the proportion which prudence required them to maintain between this mass of deposits, which they might be asked to meet in cash, and their holding of cash, on the other side of the balance sheet. A rough and elastic proportion was thus established between their holdings of legal tender cash and credit at the Bank of England, and the extent to which the banks could create deposits by granting credits to the community. It will be seen, when we look again at the balance sheet, that, besides their cash, the banks held assets which, in varying degrees,