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 clapped another £500,000,000 on to both sides of the balance sheet.

It may safely be assumed that most of the increase in investments was due to subscriptions by the banks to various forms of Government securities issued for war purposes and likewise a large part of the increase in discounts and advances, because many of them included their holdings of Treasury Bills under discounts. Treasury Bills grew from £21,000,000 at the end of 1913 to £1,095,000,000 at the end of 1918, and though many of the new bills were placed with shipowners, munition makers and others who wanted a liquid form of investment for the huge profits that they were earning, the banks also took a big share of them. Owing to these huge profits that the industrialists were earning they had little need to rely on their banks for credit, so that the increase in discounts and advances was probably due, apart from Treasury Bills, to loans to customers for taking up war loans.

Both these processes by which the banks were used to finance the war—direct investment, and loans to customers for investment, in war loans—were bad for the country and for the banks. For the country because they meant the production of fresh spending power instead of spending power being taken