We have already considered whether it is advisable to extend this class of business.

The last item in the balance sheet is bank premises, the usual custom being to reduce the amount gradually.

With regard to the profit and loss account, it is simply a statement showing how it is proposed to divide the net gains made during the half-year.

The profits of a bank are, of course, dependent upon the interest obtained by lending, as it were, the assets. The cash reserves of the banks form a contingent fund, and, therefore, we might say that about 14 per cent. of the assets do not produce any income. In recent years the tendency is for investments to increase and loans and advances to decrease. This naturally means less profits, because the rate of interest on all first-class investments is being reduced.

The monthly balance sheets and half-yearly balance sheets are now keenly criticised, and this we think will in course of time tend to strengthen our banking system.

We have seen that great changes have taken place in our banking system from an early period, and especially during the present century. This change is still going on; many banks after a long and honourable career are being merged into large banking institutions.

At present it is difficult to form an opinion with regard to the new system, but if in the future banking in this country is to be transacted by a comparatively small number of banks, it is highly desirable that adequate cash reserves should be held, and also that a perfect system of audit be adopted.

Another subject may be mentioned in connection with banking of the present day, and that is bimetallism. Any change in our system of currency may have a very important effect upon banking and commerce, and therefore the subject of bimetallism should be understood in order to ascertain how far the trade of this country would be affected by any such alteration. We have recently seen a rich country like the United States compelled to protect its gold reserves, in consequence of unwise silver legislation in former years. Again, we notice public opinion in Germany being in favour of bimetallism, and therefore it is important for England, if necessary, to uphold her present system of currency. We do not intend to state the arguments for and against bimetallism, but wish to point out how deeply such changes may affect our banking system.

The formation of the Institute of Bankers in 1879 has been of great service to banking, because it has endeavoured to promote uniformity of practice amongst the banking institutions of this country.