If Lombard Street were on a sudden thrown into liquidation, and made to pay as much as it could on the spot, that 2,000,000 L.would be all which the Bank of England could pay to the depositing banks, and consequently all, besides the small cash in the till, which those banks could on a sudden pay to the persons who have deposited with them.
We see then that the banking reserve of the Bank of England--some 10,000,000 L.on an average of years now, and formerly much less--is all which is held against the liabilities of Lombard Street; and if that were all, we might well be amazed at the immense development of our credit system--in plain English, at the immense amount of our debts payable on demand, and the smallness of the sum of actual money which we keep to pay them if demanded.

But there is more to come.

Lombard Street is not only a place requiring to keep a reserve, it is itself a place where reserves are kept.

All country bankers keep their reserve in London.

They only retain in each country town the minimum of cash necessary to the transaction of the current business of that country town.