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163 that the Bank, from a desire to do everything in its power to afford general assistance in times of banking or commercial distress, should ever have acted in a way to encourage such an opinion. The more the conduct of the affairs of the Bank is made to assimilate to the conduct of every other well-managed bank in the United Kingdom, the better for the Bank, and the better for the community at large."

I am scarcely a judge, but I do not think Mr. Hankey replies to the Economist very conclusively.

First. He should have observed that the question is not as to what ought to be, but as to what is. The Economist did not say that the system of a single bank reserve was a good system, but that it was the system which existed, and which must be worked, as you could not change it.

Secondly. Mr. Hankey should have shown "some other store of unused cash" except the reserve in the Banking Department of the Bank of England out of which advances in time of panic could be made. These advances are necessary, and must be made by some one. The "reserves" of London bankers are not such store; they are used cash, not unused; they are part of the bank deposits, and lent as such.

Thirdly. Mr. Hankey should have observed that we know by the published figures that the