Having briefly considered the progress which the various banking institutions have made, we will now show the enormous increase of deposits in all the banks of the United Kingdom.

Mr. J. G. Hubbard stated that the deposits held by country bankers from 1832-1841 were from £16,000,000 to £20,000,000. In 1847 Mr. Wilson stated that the banks in the United Kingdom were about 1600 and that their deposits amounted to £200,000,000 or £250,000,000. The accumulation in recent years has been very great. Mr. Newmarch in 1850 stated that the deposits of the banks in the United Kingdom were about £260,000,000, and Mr. Palgrave in 1871 estimated the amount as £662,000,000.

Mr. Dun stated in his paper read before the Statistical Society in 1876 that the amount had increased to £782,000,000, as follows: -

It must be also remembered that the Foreign and Colonial banks in London have a large amount of capital at their disposal: 27 Colonial Joint-stock Banks with London Offices, £156,305,379 22 Foreign „ „ „ 59,466,147 besides 23 Colonial and Foreign joint-stock banks without London offices. This latter class has large sums of money deposited with the London bankers.

Mr. James Dick in a paper read before the Institute of Bankers in 1892 gives the following estimate of deposits in banks for 1891, viz.: -

We must not forget the rapid progress which the Savings Banks have made since they were established in 1818: -

1863 Post-Office Savings Banks opened.

In 1891 the total deposits in Savings Banks amounted to £113,983,000, showing an increase in thirteen years of £39,000,000.

This great accumulation of money in banks during recent years shows the rapid growth of capital in the United Kingdom. Mr. Griffen estimated the capital of the country to be £8,500,000,000. This great increase in the wealth of this country is no doubt partly due to the banks, which have directed capital to enterprises where it can be utilised at a profit. There are, however, some dangers connected with this vast accumulation of money in banks. For instance, we have in this country only one place (viz., the Bank of England) where the sudden requirements of the money market can be met. It is the only place where gold can be obtained in any large quantities to meet a sudden demand. The bankers keep practically their reserves with the Bank of England, and therefore in times of bad credit it has to meet great demands. Although, therefore, the increase in deposits has been very rapid, the increase in the reserves of bankers has been small, partly in consequence of the Bank of England being the bankers' bank.

Of course, it is impossible to meet all liabilities on demand, yet it is necessary for banks always to have sufficient reserves to meet any sudden withdrawal of deposits. Again we know that large reserves are necessary during periods of financial distrust, when it is desirable that good mercantile firms should be able to obtain accomodation.