Reserves of Cash

Cash in Hand L 41,000,000

Making proportion of cash reserve to liabilities to the public about per cent.

(4) National banks of united states (October 3, 1872).

Liabilities

Circulation L 67,000,000
Deposits L 145,000,000
Total liabilities L 212,000,000

Reserve of Cash

Coin and legal tenders in hand L 26,000,000

Making proportion of cash reserve to liabilities to the public about 12.3 per cent.

SUMMARY

Liabilities Cash held Proportion of cash
to the public to liabilities per
cent
Bank of England and London Joint Stock Banks 20,000,000 13,500,000 11.2 Bank of France 125,000,000 32,000,000 25.0 Banks of Germany 88,000,000 41,000,000 47.0 National Banks of United States 212,000,000 26,000,000 12.3

Note B.

Extract from Evidence Given by Mr. Alderman Salomons before House of
Commons Select Committee in 1858

1146. [Chairman.] The effect upon yourselves of the pressure in November was, I presume, to induce you to increase your reserve in your own hands, and also to increase your deposits with the Bank of England?—­Yes, that was so; but I wish to tell the Committee that that was done almost entirely by allowing the bills of exchange which we held to mature, and not by raising any money, or curtailing our accommodation to our customers.  Perhaps it may be interesting to the Committee to know that on the 11th of November we held discounted bills for brokers to the amount of 5,623,000 L. Out of those bills, 2,800,000 L. matured between the 11th of November and the 4th of December, and 2,000,000 L. more between the 4th of December and the 31st.  So that about 5,000,000 L. of bills matured between the 11th of November and the 31st of December; consequently we were prepared, merely by the maturing of our bills of exchange, for any demands that might possibly come upon us.

1147.  I understand you to say that you did not withdraw your usual accommodation from your own customers, but that you ceased to have in deposit with the bill-brokers so large a sum of money as you had before?—­Not exactly that; the bills which we had discounted were allowed to mature, and we discounted less; we kept a large reserve of cash.

1148.  That is to say, you withdrew from the commercial world a part of that accommodation which you had previously given, and at the same time you increased your deposits with the Bank of England?—­Yes, our deposits with the Bank of England were increased.  We did not otherwise withdraw accommodation.

1149. [Mr. Weguelin.] Had you any money at call with the billbrokers?—­A small amount; perhaps about 500,000 L. or less, which we did not call in.

1150. [Chairman.] What I understand you to say is, that the effect of the commercial pressure upon you was to induce you upon the whole to withdraw from commerce an amount of accommodation which in other times you had given, and at the same time to increase your deposits with the Bank of England?—­So far only as ceasing to discount with strangers, persons not having current accounts with us.