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The Economist, 7. März 1868. S. 261/262.
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Money Market. Rate of Discount.

The deposits in the hands of billbrokers and bankers in London are our „Loan Power.“ Our Private Banks do not publish any account. Much of the deposits with B.o.E., London and Westminster Bank, and other strong Banks, used to be kept at Overends: other money transferred from the weaker to those stronger Banks. Trade of the Country by far not so profitable as formerly. Does therefore afford less means of saving. Therefore, no large increase from this source in the Deposits of Lombard Street.

The Liabilities of the Bank o. E. much augmented. Therefore Reserve must be proportionaly proportionally augmented.

Its reserve should be = 2/5 of liabil. = 10 Mill. £. This neutralises the result of the increase of loanable capital which augmentation of Private Deposits seem to indicate.

Bullion: By last account in Febr. Reserve in Banking Department in Notes und Coin £13,231,939. If 10 Mill. Reserve necessary, this not much to be diminished. In England increase of liabilities is in Deposits, in France in Notes Circulation – the first and most elementary type of credit.

Bank o. France subject to no Peel act. It keeps some proportion of bullion etc against all its liabilities, and gives no special favour to one sort of Liabilities, the Notes.

Credit: Low State. Worse than after 1847 or 1857. Credit is the effectual demand for capital. When credit is good, discounters will discount many bills readily; when credit is bad, they discount fewer bills, and with qualms. The difference is between a brisk high market and a stagnant low one.

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