No doubt the Bank's large working capital of over £17,500,000 has contributed very considerably to its ascendancy, and helped it, especially since 1844, to more than hold its own against all comers; for despite the fact that we occasionally hear sneers—no doubt prompted by jealousy—at its so-styled omnipotence, an examination of its return soon convinces the sceptical that it is still the largest and safest bank in England. Further, it has occupied this enviable position for over two hundred years.
The ratio per cent. of Advances (loans, bills discounted, securities, &c.) to Liabilities is only 38·21—a proportion, especially when it is remembered that an unknown amount of investments is included therewith, which clearly informs us that the Bank is fully alive to the responsibilities of its unique position, and that its directors, while they are no doubt anxious to make as much net profit as possible for the proprietors, have not lost sight of the fact that they also have duties to perform towards the public.
But it must not be thought that the directors discharge their duties towards the public so well from philanthropic motives. Even from a selfish standpoint it pays them to keep the Bank thoroughly prepared, as, should they allow the reserve to sink too low, an anxious period would be certain to follow, when additional profits, made by trading with too large a proportion of the deposits, would speedily be swept away by the expense incurred by borrowing back at high rates in order to strengthen the cash in hand. For a little while the interest upon the increased loans would swell the profits, but directly the foreign exchanges moved against this country, and gold began to flow abroad, even an inexperienced director would realise the folly of risking a panic for the sake of seeing the dividends rise, and he would not make such a doubtful experiment a second time.
Perhaps, before bringing this chapter to a close, it may be interesting to compare the total indebtedness of the Bank of England to the public and its stockholders with that of Lloyds and the National Provincial Bank of England to their customers and shareholders. The following table will supply the figures:—
| ======================================================== | |
| Name of Bank. | Total Liabilities. |
| ———————————————————————————————— | |
| £ | |
| Bank of England | 101,681,010 |
| Lloyds | 58,411,041[*] |
| National Provincial Bank of England | 56,444,126[*] |
| ———————————————————————————————— | |
| [*]Balance Sheet dated 31st December, 1901. | |
| ======================================================== | |
We can now see how much larger are the working resources of the Bank of England than those of either of the other above-mentioned banking institutions, though, as the joint stock banks keep their reserves of cash with the Bank of England, the comparison loses a little of its force. Still, the preponderance of the Bank of England is most marked, a fact one is not, perhaps, so apt to realise when the Issue and Banking Departments are considered apart.